Soybeans, corn, wheat end week on a strong note

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Soybeans, corn, wheat end week on a strong note

Soybeans were sharply higher on commercial and technical buying, establishing contract highs in May, July, and November to cap off a bullish week. Contracts had another round of support from the tight supply, solid cash basis, and strong global vegetable oil demand. July soybean oil did hit a new contract high before finishing only modestly higher and bean meal was up on commercial demand. Expanding drought conditions in the U.S. could impact planting and early development to some degree. The USDA’s weekly crop progress and condition report is out Monday at its usual time. China’s National Grain and Oils Information Center projects 2021 domestic production at 18.4 million tons, compared to 19.6 million in 2020 because of a decrease in planted area, with 2021/22 vegetable oil imports at 11.4 million tons, compared to 11.2 million in 2020/21, including 6.7 million tons of palm oil, an increase of 300,000 tons from the previous marketing year. Soybean imports are estimated at 102 million tons, compared to 98 million this marketing year. Customs data from China has April soybean imports at 7.45 million tons, compared to 6.714 million in April 2020, with year-to-date purchases at 28.63 million tons, 17% ahead of the 2020 pace. Brazil says it exported a record 17.4 million tons of soybeans in April, with 73% of that headed to China. So far in 2021, Brazil has exported 33 million tons of soybeans. The Buenos Aires Grain Exchange says 53% of Argentina’s soybean crop is harvested, with production expected to be 43 million tons. Statistics Canada says canola stocks on March 31st, 2021 were 6.572 million tons, compared to 10.554 million on March 31st, 2020. Soybean stocks were reported at 1.967 million tons, compared to 2.823 million a year ago.

Corn was higher on commercial and technical buying, making new highs for the move and closing with strong weekly gains. China bought 1.36 million tons of new crop U.S. corn, fulfilling some of the recent trade rumors, and unknown destinations picked 188,468 tons, with 86,868 tons for this marketing year and 101,600 tons for next marketing year. Even with the recent U.S. rally, Chinese corn prices remain well above U.S. prices. China’s National Grain and Oils Information Center estimates 2021/22 corn imports at 20 million tons, compared to 28 million in 2020/21, with the 2021 domestic crop projected at a record 272 million tons, a jump of 4% from 2020. Corn consumption is seen at 291 million tons, compared to 285 million the previous year, with livestock feed use next marketing year at 192 million tons, compared to 187 million this marketing year. Sorghum imports are expected to rise 3 million tons to 10 million. Corn is monitoring crop condition concerns in the U.S. and Brazil. The USDA is expected to lower Brazil’s second crop corn production estimate in next week’s supply and demand update because of warm, dry weather. Those numbers are out on Wednesday, the 12th at Noon Eastern/11 Central. Brazil says corn exports for April were 130,000 tons, putting the year-to-date total at 3.6 million tons, 23% faster than the 2020 pace. The Buenos Aires Grain Exchange left its production estimate for Argentina unchanged at 45 million tons. Ethanol futures were unchanged. According to Statistics Canada, the corn supply at the end of March 2021 was 8.147 million tons, compared to 7.993 million the year prior.

The wheat complex was higher on commercial and technical buying, with week-to-week gains across the complex and new contract highs for July Kansas City and Minneapolis. The drought or near drought conditions stretching from the U.S. Plains into the Canadian Prairies remains the big driver for wheat, pulling deferred Minneapolis contracts above $8. U.S. soft red winter and global conditions generally look good. France’s soft wheat crop condition rating did decline slightly but remains well above a year ago. IKAR did lower its estimate for Russia to 79 million tons, a half million less than the last guess. There’s talk about higher double crop soft red winter acreage in parts of the Midwest. The trade is also keeping an eye on increasing feed wheat demand. It’s still largely anecdotal in the U.S., but wheat is being used as a replacement for corn and soybean meal in some feed rations. Statistics Canada says all wheat stocks on March 31st were a five-year low at 16.231 million tons, compared to 18.781 million a year ago, with the non-durum supply at 13.478 million tons, compared to 15.476 million last year. China’s National Grain and Oils Information Center expects 2021 wheat production to be 136.4 million tons, up 1.6% from 2020.